Tobi Aminu – Page 69 – Sunmola David & CO

Court of Appeal Affirms Educational Institutions’ Companies Income Tax Obligation

The Court of Appeal (CoA), in December 2018, upheld the ruling of Federal High Court (FHC) on the liability of educational institutions to pay companies income tax (CIT). The judgement arose from an appeal by Best Children International Schools Limited (BCIS/the Appellant) against Federal Inland Revenue Service (FIRS) in respect of the FHC decision that BCIS’ profits do not qualify for exemption under Section 23(1)(c) of Companies Income Tax Act (CITA). Background In 2014, FIRS assessed BCIS to CIT and tertiary education tax (TET). BCIS challenged this by instituting an action at the FHC. The FHC decided in favour of FIRS on the premise that BCIS is a company limited by shares (CLS) and thus not an educational institution with public character. BCIS appealed the decision, urging the CoA to determine the appropriateness of FHC’s reliance on Section 26 of Companies and Allied Matters Act (CAMA) in determining its exemption status under CITA and to provide an injunction restraining FIRS from enforcement of the assessment on the Appellant. The CoA upheld the FHC decision declaring that BCIS is liable to tax as it was not registered as a company limited by guarantee (CLG). According to the CoA, a CLS is for profit making and must pay income taxes. The fact that BCIS is a school or an educational institution is not enough to exempt it from payment of taxes. Analysis and implications of the decision Section 23(1)(c) of CITA exempts “profits of any company engaged in ecclesiastical, charitable or education activities that are of public character and the profits are not derived from a trade or business carried on by such company.” In view of the above, I have examined the conditions and considerations for exemption below: Nature of activity: the activities must be educational in nature. Although not defined in CITA, educational activities are easy to determine and BCIS was able to demonstrate it carries out educational activity. Activities must be of public character: CITA does not define “public character”, thus its interpretation often generates issues. The CoA ruled that BCIS did not prove that its educational activities are of a “public character”, thus the exemption is inapplicable. Moreover, the Appellant’s proprietor introduced herself as a member of the National Association of Proprietors of Private Schools. In a similar case between American International School (AIS) and FIRS, brought before the Tax Appeal Tribunal (TAT) in 2015, FIRS sought to levy CIT on AIS on the grounds that it was not an educational institution of “public character”, even though AIS was registered as a CLG. This is because the services rendered by AIS were for a fee and could not be said to be available to every Nigerian. AIS argued that its activities are of a “public character” using an analogy of “institution of a public character” as defined in Paragraph 9 of the Requirements for Funds, Bodies or Institutions Regulations, 2011, pursuant to FIRS’ Establishment Act, which defines such body as “a body or institution whose activities are meant to benefit Nigerians in general and particularly the public and its profits are not available for distribution to its promoters”. TAT ruled in favour of AIS, on the following bases: No segment of the Nigerian public was excluded from the services rendered by AIS – FIRS did not provide any evidence of exclusion of any segment AIS’ profit/income was not distributed to AIS’ directors or guarantors AIS derives profit only from educational services. The above presupposes that an entity would be able to claim “public character” if no segment of the Nigerian public is excluded from benefiting from its educational activities. This then raises the question of the extent of exclusion that will negate “public character” – would gender, special needs, foreigners only etc., constitute exclusion of any segment of the Nigerian public from having access to educational services? Additionally, does the fee charged by the schools ensure availability to all segments of the Nigerian public, or does it ensure that only the segment of the public that pays enjoys the benefit? Non-derivation of profit from a trade or business: One of the bases of CoA’s decision was that BCIS failed to prove that its profit was not from a trade or business. Simply put, trade is a business carried on for profit purpose. Thus, applying CITA strictly, offering educational services at a fee with a view to making profit would constitute a trade/ business which negates the exemption. Notwithstanding, applying this strict interpretation would be counter-productive, as Section 23(1)(c) of CITA is an exemption provision. It envisages that educational institutions would make profits, it only exempts those profits from tax. This view was given credence in AIS v FIRS where TAT held that charging fees for educational services is not strange to the income generation activities of a school. Considering that educational entities are mere artificial persons holding interest of promoters, ability to distribute profits from the trade to ultimate beneficiaries becomes important. This, in my view, forms the basis of taking cognizance of modality of set up. Thus, CoA’s focus on the form of registration (which ultimately affects distribution to promoters) in BCIS v FIRS appears to be in order. One of the grounds of dismissing the appeal is that BCIS did not prove that it was registered as a CLG (proscribed from distributing profits to promoters). Rather, it was presented by FIRS as a CLS (permitted to share profits to shareholders). One perspective on this is consideration of what happens if a CLS does not distribute profits and has no intention of distributing profits and documents thisfact in its Memorandum and Articles of Association (MEMART). Would such educational institution then be considered to be of public character? In my view, this should not absolve such companies as the MEMART may be amended while the restriction under a CLG or incorporated trust is pursuant to a law which is not under the control of the promoters. Conclusion Educational institutions (with the ability to distribute profits to promoters

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FIRS Enforcement Move Threatens Investors Confidence

TAX SERVICES / Tobi Aminu

Only recently, business owners were awakened to cruel bank transaction notifications running into millions of naira undertaken without their consent. On further enquiries from their respective banks, they were shocked to learn that the Federal Inland Revenue Service (FIRS) had issued fiat to financial institutions to put lid on accounts of suspected tax defaulters. “We just woke up, saw notifications from our banks that the FIRS told them to put a lien of an outrageous amount in taxes we are owing; that was about a N100 million,” one of the affected business owners told THISDAY on conditions of anonymity. The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, recently disclosed that the sum of N23 billion had been recovered from 45,000 tax defaulters, who had over N100 million as turnover in their respective bank accounts. He further hinted that a new batch of 40,000 millionaires would be targeted in this year. However, the latest mode of clampdown on businesses, which had failed to comply with their tax obligations have been severely criticised in some quarters, including FIRS staff and renowned tax and audit authorities. A source further told THISDAY that some staff of the revenue agency had even urged affected individuals to seek legal redress as the move by Fowler was unprecedented, with grave implications for the growth of small enterprises which are critical for economic development. Famous audit firm KPMG, had promptly questioned the FIRS move, describing it as “draconian”. It stated: “We note and salute the FIRS’ objectives to bring delinquent taxpayers into the tax net and consequently increase the federal government’s tax revenue. “However, the current practice whereby the FIRS issues fiat to freeze taxpayers’ bank accounts generally and to demand that SBs pay alleged outstanding tax liabilities from customers’ bank balances without recourse to affected persons, is draconian. “This will cast doubt on the federal government’s drive to improve the ease of doing business in Nigeria, diminish the credibility of the Nigerian tax system, and erode investors’ confidence in the Nigerian economy.” The company also called on taxpayers to “ensure that they fulfill their civic obligations by paying the right amount of taxes and filing relevant tax returns with the tax authorities, as and when due”. Apparently, under pressure from critics over its unpopular actions to compel compliance through seizure of accounts, Fowler had within the week halted the freezing of bank accounts of tax defaulters for 30 days. According to him, the directive became necessary in view of the large number of taxpayers, who had besieged its offices in their bid to regularise their tax positions, coupled with the inconveniences they encountered during the process.But in spite of the criticisms bedevilling the FIRS measures, particularly the seeming lack of due process in freezing bank accounts, the service appears unperturbed and has maintained that it possessed powers under its Establishment Act to take the steps. Justifying its actions, FIRS spokesman, Mr. Wahab Gbadamosi, responding to THISDAY enquiries maintained that “tax is anchored on law, the basis of tax is law in the first place” stressing that the FIRS Establishment Act (FIRSEA), Company Income Tax Act (CITA) among others already provided the basis for its actions. Quoting relevant sections of the Act, Gbadamosi said, “The Service may require any person to give information as to any money, fund or other assets, which may be held by him for, or of any money due from him to, any person. “Also note that Section 49 of CITA further empowers FIRS to take all the steps we have taken with respect to recovery of tax debts from billionaire and millionaire tax defaulters.” What Gbadamosi does not seem to understand is that a country tax regime is one of the factors potential investors consider in choosing where to invest their funds. Nevertheless, KPMG, in its position paper released in February, argued that the revenue collection agency had overstepped its bound in a bid to expand its tax revenue base. The firm added that contrary to FIRS’ claim, “nothing in the CITA or FIRSEA authorises the FIRS to impose a freeze order on a taxpayer’s bank account beyond the amount of tax proven to be due and payable by that taxpayer.” As the argument over the legality or otherwise of the FIRS actions persist, particular attention should be paid to the negative impact it would have on the investment atmosphere, especially at a period when the federal government is working hard to improve the ease of doing business in the country, which had been a point of concern to wooing foreign investment into the country. The freezing of companies’ bank accounts at will further calls to question the non-disclosure obligations the banks themselves owe to customers, especially as this is not yet a criminal case until proven by a court of law, and could dampen the confidence of small and medium enterprises, which are struggling to grow under an already harsh business environment. According to a source who had his accounts frozen and later released, what they (FIRS) are doing is illegal and abnormal without following the law. There was nothing like consulting the taxpayers, telling them of their discrepancy and issues in their taxes-absolutely nothing like that. “Somebody sits down, calls the bank, looks at your turnover and slams you a tax, without confirming whether you have paid or not, whether you are in compliance or not, whether you are in breach or not and without even going through your TIN because they are the custodian of who is an active tax payer or not.” The resultant development had seen those who had no issues in their tax filing suffer unnecessarily during the siege on their accounts by the FIRS, which requested affected clients to show up at its headquarters in Abuja to reconcile their tax records. Although, FIRS deserves commendation for embarking on innovations that had seen tax receipts grow in recent times, its new approach to enforcing compliance poses a grave concern, which if not addressed

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FIRS Soft Pedals, Directs Banks To Unfreeze Tax Defaulters’ Accounts

TAX SERVICES / Tobi Aminu

As a result of complaints by Nigerians and industry experts, the Federal Inland Revenue Service (FIRS) has written to banks, directing them to lift the lien on tax defaulters’ bank accounts for 30 days. The directive, which takes immediate effect, was contained in a letter from the Chairman, FIRS, to bank Managing Directors. FIRS, however, made the announcement in a statement posted on its official Twitter account Friday night. The agency explained that it issued the directive because of the large number of taxpayers, who have besieged its offices in their bid to regularize their tax positions and the inconveniences they are going through. It should be remembered that the FIRS recently issued Letters of Substitution, pursuant to Section 49 of the Companies Income Tax Act (CITA) 2004 and Section 31 of the Federal Inland Revenue Service Establishment Act (FIRSEA) 2007, to banks in Nigeria, appointing them as tax collecting agents for certain listed customers maintaining bank accounts with such banks. The FIRS, in the said Letters of Substitution, alleged that the affected companies have breached their tax obligations by failing to pay tax to the FIRS, as and when due, and provided the SBs with an indication of a specific amount owed by each said company. The SBs were directed to set aside the indicated sums and pay such over to the FIRS in full or partial payment of the alleged tax debt. KPMG advisory services had on Thursday stated that FIRS have gone draconian by giving fiats to banks to freeze accounts of suspected tax defaulters. “The current practice whereby the FIRS issues fiats to freeze taxpayers’ bank accounts generally and to demand that SBs pay alleged outstanding tax liabilities from customers’ bank balances without recourse to affected persons, is draconian. This will cast doubt on the Federal Government’s drive to improve the ease of doing business in Nigeria, diminish the credibility of the Nigerian tax system, and erode investors’ confidence in the Nigerian economy,” the for wrote in an explanatory note. It, however, stated that taxpayers must also ensure that they fulfil their civic obligations by paying the right amount of taxes and filing relevant tax returns with the tax authorities, as and when due. Source: Tribune

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50% fee cut to encourage 34m SMEs to formalise – Lady Azinge

CAC SERVICES / Tobi Aminu

The Acting Registrar General of the Corporate Affairs Commission (CAC), Lady Azuka Azinge, has said that the Federal Government reviewed the fee for business registration downward by 50 per cent to encourage Small and Medium Enterprises (SMEs) to formalise their businesses. She said this when the management of Daily Trust Newspaper visited her in the CAC headquarters in Abuja yesterday. Represented by the Commission’s Director of Registry, Mr Abdul Hakeem Mohammed, Lady Azinge said the National Bureau of Statistics (NBS) estimated that about 34 million SMEs operate in the informal sector of the economy and the fee reduction was targeted at enrolling them into the formal sector of the economy. She said the reduction, which was a part of the Commission’s Business Incentive Strategy (BIS), brought down the fee for business registration from N10, 000 to N5,000 to encourage more SMEs to give their businesses formal identities. The CAC boss said the incentive was meant to last for the last quarter of 2018 but popular demand led to an extension to March 31, 2019. She urged SMEs that are yet to take advantage of the incentive window to register their business names before the deadline. The Head of Public Affairs Department of CAC, Mr. Godfrey Ike, commended Daily Trust for being professional and setting the pace for journalism practice in Nigeria. Source: Daily Trust

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Appointment of Banks by FIRS as Collecting Agents for Recovery of Alleged Tax Liabilities

Tax news / Tobi Aminu

The Federal Inland Revenue Service (FIRS) recently issued Letters of Substitution, pursuant to Section 49 of the Companies Income Tax Act (CITA) 2004 and Section 31 of the Federal Inland Revenue Service Establishment Act (FIRSEA) 2007, to banks in Nigeria (“the Substitution Banks” or “SBs”), appointing them as tax collecting agents for certain listed customers (“affected companies”) maintaining bank accounts with such banks. The FIRS, in the said Letters of Substitution, alleges that the affected companies have breached their tax obligations by failing to pay tax to the FIRS, as and when due, and provided the SBs with an indication of a specific amount owed by each said company. The SBs were directed to set aside the indicated sums and pay such over to the FIRS in full or partial payment of the alleged tax debt. Furthermore, the FIRS demanded that the banks should not execute any mandates on those accounts without its prior approval. A number of taxpayers concerning whom similar Letters of Substitution were issued by the FIRS in 2018, suffered the consequence of being unable to access their bank accounts for paying salaries or making routine transactions until the “freeze” order imposed by the FIRS was lifted. Indeed, the first time that many affected companies knew of the existence of these Letters of Substitution was typically when bank mandates were rejected by their bankers. The FIRS also demanded the SBs to provide the companies’ (and their subsidiaries’) detailed bank statements and financial records, and records of all principal officers of the companies. The FIRS based its actions on the provisions of Sections 28 and 29 of the FIRSEA. Background Sections 31 of the FIRSEA and Section 49 of CITA allow the FIRS to appoint any person, by notice in writing, to be an agent of a taxpayer, where such person is in custody of any money belonging (or due) to the taxpayer. The appointed agent may be required by such notice to pay any tax “payable” by the taxpayer to the FIRS out of the taxpayer’s money in his custody. The FIRSEA and CITA provide that any appointment made by the FIRS under these sections of the law would be “subject to the provisions of the tax legislation with respect to objections and appeals”. Section 69 of CITA allows a taxpayer to object to a disputed assessment within thirty (30) days from the date of service of the notice of assessment. Section 77(3) of CITA further provides that the collection of tax, in any case where notice of an objection or appeal has been given by a taxpayer, shall remain in abeyance until such objection or appeal is determined. Nothing in the CITA or FIRSEA authorises the FIRS to impose a freeze order on a taxpayer’s bank account beyond the amount of tax proven to be due and payable by that taxpayer. The requirement directed to banks not to honour mandates from taxpayers over and above the tax amount supposedly proven by FIRS to be due and payable is without foundation and goes too far. Matters Arising It is not clear from the provisions of the FIRSEA or CITA relied upon by the FIRS that its power of substitution is expected to be exercised without notice to the affected taxpayers. Indeed, it seems reasonable that no tax would be due from a taxpayer ex parte or at the sole discretion of the tax authority. At least, a tax assessment would first have been issued either on a self-assessment basis by the taxpayer, or by the FIRS in exercise of its powers to issue a deemed income tax assessment in default of a self-assessment (or a tax audit-related assessment following an audit exercise). The tax assessment must have become final and conclusive before a tax payment can be said to be due and payable by a taxpayer. The burden should, expectedly, be on the FIRS to prove to the SBs that a tax assessment issued against each taxpayer has, indeed, become final and conclusive prior to issuance of the Letter of Substitution. The FIRS makes no effort in its Letter to “prove” or provide any reasonable basis for the banks to conclude that tax payments are, indeed, due from the taxpayers listed therein. The SBs are constituted by Section 49 of CITA and Section 31 of the FIRSEA to be agents of the affected taxpayers and required to act on their behalf. Clearly, the intention of the law is to preserve the tax due and prevent a taxpayer from dissipating its resources without settling its tax liabilities. This must be a measure of last resort or justified by extreme circumstances of a difficult taxpayer with acknowledged liabilities. The SBs, being agents to the taxpayer, owe a duty of care to their principal and not to the FIRS. The SBs, therefore, are exposed to risks, if they were to pay over the sums demanded by the FIRS and it should be established that no such liability (or less liability than the sum actually paid) was due from the taxpayer on whose behalf such payment was made. The Letter of Substitution does not include an indemnity to the SBs for this eventuality. Sections 31(5) and 49(3) of the FIRSEA and CITA, respectively, provide that any notice issued by the FIRS to appoint a bank as an agent of tax collection would be subject to objections and appeals as though such notice were an assessment. Further, Section 36 of the 1999 Constitution of the Federal Republic of Nigeria guarantees a person’s right to fair hearing in civil matters, which include taxation. Hence, the FIRS should allow for mechanisms whereby affected persons can object to and appeal against notices issued under the above-referenced provisions. Where a taxpayer disagrees with a notice issued by the FIRS, it is unclear if SBs (in their capacity as agents of the taxpayers) would be required to object to the FIRS on behalf of the customer, or if the taxpayer would be required to object to

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FIRS has gone draconian by freezing accounts of alleged tax defaulters, says KPMG

Tax news / Tobi Aminu

KPMG, one of the Big Four auditors in the world, says Nigeria’s Federal Inland Revenue Service (FIRS) has gone draconian by giving fiats to banks to freeze accounts of suspected tax defaulters. In September 2018, Tunde Fowler, FIRS chairman, said the service was going after 6,772 tax defaulters, stating that they would have their account frozen till they pay due taxes. “So, all these ones of TIN and no pay and no TIN and no pay, to the total of 6772 will have their accounts frozen or put under substitution pending when they come forward,” Fowler had said. “First, they refused to come forward in 2016, they refused to come forward under VAT and are still operating here. So, we are putting them under notice that it is their civic responsibility to pay tax and to file returns on these accounts.” In reality, FIRS has not only frozen the accounts in question, but have also stopped some companies from paying staff salaries or carrying out routine transactions. In addition to this, FIRS has also ordered the banks to deduct the alleged tax debt from these bank accounts “in full or partial payment”. In its KPMG in Nigeria issue 2.5 released in February 2019, the professional service firm, said FIRS has gone too far in its bid to get more people into the tax net. KPMG argued that Section 69 of Companies Income Tax Act (CITA) 2004 “allows a taxpayer to object to a disputed assessment within thirty (30) days from the date of service of the notice of assessment”. The firm adds that “Section 77(3) of CITA further provides that the collection of tax, in any case where notice of an objection or appeal has been given by a taxpayer, shall remain in abeyance until such objection or appeal is determined”. KPMG CONTRAVENING COMPANIES INCOME TAX ACT KPMG said “nothing in the CITA or FIRSEA authorises the FIRS to impose a freeze order on a taxpayer’s bank account beyond the amount of tax proven to be due and payable by that taxpayer”. “The requirement directed to banks not to honour mandates from taxpayers over and above the tax amount supposedly proven by FIRS to be due and payable is without foundation and goes too far.” It added that “the letters to the SBs leave them with 7 days within which to comply with the directives of the FIRS. This is contrary to the provisions of Sections 69 and 77(3) of CITA which permit a taxpayer a 30-day period of review and objection”. FIRS BREACHING BANK-CLIENT CONFIDENTIALITY KPMG stated that the letters of substitution issued to the banks breach the confidentiality agreement between banks and their clients. “Generally, a bank has a fiduciary obligation to maintain the confidentiality of its customers and their transactions, and to prevent third-party access to the customers’ account information,” KPMG said. “The exceptions to this duty are in cases where the bank is required by law or a court of competent authority to make disclosure, and where the customer consents to the disclosure. “We note that the FIRSEA and CITA allow the FIRS to request certain banking information (without breaching the bank’s duty of confidentiality), such as names and addresses of new customers and specific individuals, and details of transactions above N5 million and N10 million for individuals and companies, respectively. “However, these provisions, including relevant provisos, should not be interpreted to have given the FIRS the absolute power to demand all forms of customer information, including details of account balances, bank statements and other financial records of a company, its subsidiaries or principal officers; or power to direct when a bank may honour its customers’ transaction requests.” KPMG SALUTES FIRS TAX DRIVE — WITH CAUTION Concluding its intervention to FIRS, KPMG said: “We note and salute the FIRS’ objectives to bring delinquent taxpayers into the tax net and consequently increase the Federal Government’s tax revenue”. “However, the current practice whereby the FIRS issues fiats to freeze taxpayers’ bank accounts generally and to demand that SBs pay alleged outstanding tax liabilities from customers’ bank balances without recourse to affected persons, is draconian. “This will cast doubt on the Federal Government’s drive to improve the ease of doing business in Nigeria, diminish the credibility of the Nigerian tax system, and erode investors’ confidence in the Nigerian economy.” The company also called on taxpayers to “ensure that they fulfil their civic obligations by paying the right amount of taxes and filing relevant tax returns with the tax authorities, as and when due”. Source: The Cable

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EFCC fails to remit N1.7bn to FIRS

Tax news / Tobi Aminu

Few days after being accused of refusing to remit over N2tn said to have been seized from corrupt public officeholders, the Economic and Financial Crimes Commission has been linked to another scandal following the revelation that the commission recovered over N1.7bn from 15 companies for the Federal Inland Revenue Service but failed to remit same to the agency. Several calls, e-mails and SMS to the spokesperson for the EFCC, Mr. Wilson Uwujaren, for response on Saturday, were not replied. The Chief Executive Officer, Panic Alert Security System, Mr. George Uboh, while appearing before the Senate Committee on Ethics, Privileges and Public Petition on August 26, had disclosed how the Chairman of the EFCC, Ibrahim Lamorde, allegedly short-changed Nigeria of over N2tn. But Uboh, in an interview with journalists in Abuja on Saturday, said the over N1.7bn recovered from 15 companies was “over-due taxes on behalf of FIRS.” He alleged that the money was not remitted to the agency, saying, “FIRS in its submission denied receiving any payments/transfers from EFCC in respect of the said companies.” Documents Uboh made available to journalists showed that the funds were recovered between 2010 and 2011. The security expert said members of the public interested in getting details of his earlier N2tn seized by EFCC but unremitted to government should download the documents from his website: www.pasecng.com. The petitioner also expressed his readiness to expose the country’s former presidents, vice presidents, current and ex-governors as well as the current administration over numerous shady practices. “EFCC has been the house of refuge where looters hide. I want to demystify EFCC”, Uboh stated. The breakdown of the N1,767,594,842.65 said to have been recovered by the EFCC and list of the 15 companies include Zakhem Construction Limited — N401m; Daewoo Nigeria Limited — N208m; WAPCO — N311m; Mikano International Limited —N16m; Protea Hotel, Apo Apartments — N10m; Reiz Continental Hotels — N32m; Coscharis Motors Limited — N130m; and Elizade Nigeria Limited — N555m. Others are ITCC Technical Limited, Kaduna — N47m; Grand Ibro Hotel, Abuja — N14m; Efab Properties, Abuja — N19m; Le Meridien Hotel, Port Harcourt – N10m; Northern Nigeria Flour Mills Plc – N2.7m; Ni’ Ima Guest Palace – N2.8m; and Okomu Oil Palm Plc – N5m. Source: Business Daily

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We Accredit Genuine, Apolitical Observer Groups –INEC

CAC SERVICES / Tobi Aminu

The Independent National Electoral Commission has said that measures were put in place to ensure that Observer Groups accredited for the 2019 general elections were apolitical. The Independent National Electoral Commission has said that measures were put in place to ensure that Observer Groups accredited for the 2019 general elections were apolitical. INEC National Commissioner, Prof. Antonia Okoosi-Simbine, who is the Chairperson, Election and Party Monitoring Committee, disclosed this in an interview with the News Agency of Nigeria on Wednesday in Abuja. Okoosi-Simbine said that considering the importance of elections, the commission carried out in house due diligence to ensure that accredited observers were genuine and not those infiltrated by political parties or politicians. She said one of the measures employed by the commission in accrediting observers was to relate with groups that had experience or well known for having worked with INEC. She said: “Another criteria is that such group must be registered with the Corporate Affairs Commission. A lot of the groups that are working for politicians or political parties are not usually registered with the CAC.” Okoosi-Simbine said though some partisan groups always try to apply for accreditation but with due diligence by the commission, such groups were denied accreditation. She said that even after accreditation, INEC could withdraw the accreditation of any group considered inimical to the electoral process. Okoosi-Simbine said that observers had helped the commission to improve the electoral process through their reports. She cited the adoption of simultaneous accreditation and voting system as one of the recommendations by observer groups after the 2015 general elections. She said: “We considered that as a very important suggestion because we noted that approximately two million people accredited during the 2015 general elections did not return to vote.” Asked if INEC was paying observer groups, Okoosi-Simbine said that the commission was not funding any group to observe Nigeria elections, saying they were expected to source their funds. She said: “The commission absolutely pays nothing. It does not keep accommodation; it does not give transport to observer groups. “However, the process of observation cost the commission money. In the sense that the commission has to pay for venue, tea and coffee break, it has to provide the kits that are provided for observers. “The commission has to produce it so that everybody is dressed in a uniform manner and the polling officers can easily identify them as they come to the polling units. “So the commission actually spends money on these processes.’’ She advised accredited observer groups to stick to approved guidelines by the commission in carrying out their duties. Okoosi-Simbine reminded them that they were not to monitor but observe elections and advised them to report any anomaly to the commission. Source: The Eagle

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Kayode Calls For Urgent Tax Reforms To Save SMEs In Nigeria

Tax news / Tobi Aminu

Prince Adetokunbo Kayode, President of Abuja Chamber of Commerce and Industry (ACCI), has called for urgent tax reforms to save Small and Medium Enterprises (SMEs) from stifling demands for tax even before they make profit. Kayode who stated this while speaking with newsmen in Abuja, explained that the practice of mandatory requirement for tax clearance from companies newly registered was a disincentive for the growth and thriving of SMEs in the country and also one of the stumbling blocks in the Ease of Doing Business. While noting the ongoing progress in national tax reforms, the ACCI boss advised tax authorities to immediately review the tax clearance system to reduce the burden placed on new and young companies sprouting up across the country. “The growth of Small, Medium and Micro Enterprises depends very much on the enabling environment the government is able to create for them to grow. “Their growth will in turn create jobs and collective wealth for the nation. All that is necessary must be done to nurture such new businesses. “New companies should not be mandated to produce tax clearance until after a year or so of operations”, he noted. Wondering why tax must be imposed before operations, Kayode said members of the Chamber of Commerce had variously lamented the negative effect of that policy in their efforts to run their legitimate businesses. “If this country must grow and have a vibrant economy, the plight of the SMEs must be adequately taken into account. SMEs are of fundamental importance to us due the meaningful contribution they add to economic development. “They are constantly expanding output, generating employment, redistributing income, promoting indigenous entrepreneurship as well as greatly producing primary goods that strengthen industrial linkages. The sector is accountable for about 85 per cent of the total industrial employment in the country and between 10-15 per cent of the total manufacturing output”, the President of ACCI insisted. Source: Punch

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SWIT promotes tax advocacy among women

Tax news / Tobi Aminu

The Society of Women in Taxation, Lagos State Chapter, says it is committed to promoting tax knowledge to women in society. In a statement on Monday, SWIT said it would be educating women during its upcoming tax forum for corporate and professional women in Lagos with the theme, ‘Building a new Nigerian tax culture through women.’ The Chairperson , SWIT , Lagos State Chapter, Mrs Dena-Rose Ajayi, said women were nation builders. “Thus, there is a need to properly enlighten them on tax policy issues,” she said The chairperson said participants at the forum would include women “who are captains of industries and successful women leaders in both private and public establishments.” She said the event would also feature award session during which deserving individuals and organisations would be recognised for their contributions to development of taxation in Nigeria. According to the statement, the chapter recently held its regular tax programme for the youth by organising an inaugural tax debate for the secondary school pupils both in public and private schools in the state. Source: Punch

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